US oil booms, yet Big Oil struggles to reap the benefits

Judging by second quarter earnings, the energy resurgence sweeping the world's largest economy seems to be benefiting just about everyone except the three largest U.S. oil and gas producers.

Crude prices remain comfortably perched above $100, and the U.S. produces record amounts of oil from its booming shale development. Still, with the exception of ConocoPhillips, it's clear that the Big Three oil are struggling to see any advantages.

The comparatively dour parade of results was kicked off by ExxonMobil, which saw net income plummet 57 percent last quarter. The energy behemoth was beset by what analysts point to as a recurring theme among the oil majors: weak refinery results and lower production undermined by key outages. The news shaved more than $11 billion in market value from the stock late last week, planting Exxon back squarely behind Apple as the world's most valuable company.

Meanwhile, Chevron reported that its profits had plunged 26 percent from a year earlier, with oil and gas also sliding during the quarter. Chevron produced only 2.58 million barrels of oil per day last quarter, while Exxon produced barely 4 million barrels.

The gloom also spread across the Atlantic, as Royal Dutch Shell also fell short on profits. Its results were dampened by a massive charge to dispose of shale assets.

"Fast Money" traders Joe Terranova and Stephanie Link debate whether ExxonMobil is still a buy as its earnings dropped 57 percent from last year. And Paul Sankey of Deutsche Bank explains why he is "very much on the sidelines of Exxon."

Analysts say the disappointing results reflect how major oil companies were late to catch the wave of the North American shale surge, given their focus on international exploration and development.

"They were out looking all over the world for [oil and gas], and little did they know they had some in their backyard," said Brian Youngberg, an analyst at Edward Jones. "Shale is developed by small and medium-sized companies. The big guys have been getting into it now, but they're late to the party."

Goldman Sachs described the Big Three's performance in a research note as "a tough week." However, the firm downplayed what it called "quarterly noise" that may have distorted their earnings somewhat.

At both companies, net U.S. production of crude and natural gas was relatively flat from a year earlier—odd, considering that the U.S. is producing more than 7 million barrels per day—the most in more than two decades.

Although ConocoPhillips' second-quarter profit also fell, the company managed to defy the gloom by ramping up both output and operations in U.S. shale hot spots such as Bakken and Eagle Ford. The company's combined production in those areas spiked by nearly 50 percent during the second quarter.

Wall Street cheered and has sent Conoco's stock up more than 2 percent since Thursday.

Because the overwhelming majority of exploration takes place overseas, analysts think its unlikely that Chevron or Exxon will shift their focus domestically anytime soon. Indeed, Chevron CEO John Watson said the company would "continue to advance our major capital projects," including a liquefied natural gas facility in Angola—one of its largest projects in Africa.

Youngberg, from Edward James, said the laggards could catch up by either buying smaller U.S. players, yet a merger is fraught with risks of its own.

"The danger of making a big splash acquisition is that you buy at the wrong time, or you pay too much," he said. "They have to be careful they don't do that."